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	Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> McCue v Scottish Daily Record & Anor [1999] ScotCS 234 (8 October 1999) URL: http://www.bailii.org/scot/cases/ScotCS/1999/234.html Cite as: [1999] ScotCS 234

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In this action the pursuer sues the defenders for damages in respect of losses which he claims to have suffered as a result of the publication in the 9 July 1995 edition of the first defenders' newspaper, the Sunday Mail, of an article written by the second defender which contained what the pursuer claims was a defamatory reference to him.

The article, which is quoted in full in Article 2 of the condescendence and need not be repeated here, contained a report that the police had carried out a raid on a public house, the Cumberland Arms, run by the pursuer and had found a large quantity of forged Bank of England notes. The pursuer avers that the article was untrue and that it bore the innuendo that the pursuer and his premises were involved in dealings with counterfeit currency and in general conveyed an imputation of activities of a criminal nature. The defenders, although they admit that the article was untrue to the extent that no such raid ever took place at the Cumberland Arms, nevertheless aver that the article did not defame the pursuer, that it was substantially true, that it did not bear the innuendo which the pursuer alleges that it bore, and that if it did, that innuendo too was substantially true.

The case was appointed to the procedure roll on the defenders' motion, and they were appointed to lodge a Note of Argument. They duly did so (No. 32 of process). That document gave notice that they proposed to argue that certain of the pursuer's averments of loss should not be admitted to probation. I was informed that the pursuer had previously intimated to the court that he did not seek trial of the case by jury, and that parties were therefore agreed, subject to the points which the defenders wished to take about the averments of loss, that a proof before answer should be allowed.

The pursuer's averments of loss are contained in Articles 5 and 6 of the condescendence. It is convenient to quote them in full. I have identified certain passages by underlining or by alteration of the typeface for ease of reference when I come to summarise the defenders' submissions.

In fact the sum sued for was increased by amendment on 30 January 1998 to £700,000, but no corresponding alteration was made to the averment at the end of the passage quoted from Article 6.

At the commencement of the debate Mr Connal, who appeared for the defenders, drew my attention to the averment (at page 12E of the Closed Record) that the pursuer was sequestrated on 9 June 1997. That averment is impliedly admitted by the pursuer. The fact of the pursuer's sequestration was not, however, the primary basis of any of Mr Connal's submissions, although he submitted that it was a consideration which made the lack of specification of some of the averments of loss all the more significant. The submissions which he made fell into two distinct chapters, one concerning the averments about the Gorbals United Boys Club and the other concerning the averments about the patrimonial losses suffered by the pursuer in his business. I shall consider each of these submissions in turn. Mr Connal accepted that the pursuer had made relevant and sufficiently specific averments of injury to his feelings and harm to his reputation. He accepted, therefore, that if I accepted his submissions that the averments about the club and about patrimonial loss suffered by the pursuer in his business should be excluded from probation, there would nevertheless remain general averments of loss which should be admitted to probation.

So far as the averments about the Boys Club were concerned, Mr Connal's primary position was that they were irrelevant in their entirety. He accepted, however, that in so far as they could be viewed as doing no more than identifying a particular place which the pursuer occupied in the community in relation to which his reputation was important to him, and therefore a particular respect in which the allegedly defamatory article hurt his reputation and feelings, these averments might be regarded as relevant. His principal concern was that there was, in the reference to the Club's failure to obtain a Lottery Fund grant, a hint of patrimonial loss. The pursuer, however, had no title to sue in respect of any loss suffered by the Club. In any event, there was no averment that there was a causal connection between the publication of the article and the failure of the Club's Lottery Fund application. Mr Connal's primary motion in relation to this aspect of the case therefore was that the averments which I have identified by underlining in the passages quoted above should not be admitted to probation. Alternatively, if those averments were not to be wholly excluded from probation, at least the parts which I have printed in italics should be so excluded.

The pursuer, who appeared in person at the hearing on the procedure roll, informed me that the Club's application for a Lottery Fund grant had been made in April 1995; that he, as a founder of and prominent fund-raiser for the Club, had been involved in presentation of the application; that in August 1995 there had been some difficulty over arrangements for meetings between the Lottery Fund assessor and representatives of the Club including the pursuer; and that in October 1995 the application was refused. The pursuer did not, as I understood him, suggest that his averments about the Club were intended as the foundation for an attempt on his part to recover losses suffered by the Club. He said at one stage that the purpose of the averment about the refusal of the Lottery Fund application was to support a claim for injury to his feelings at seeing the Club with which he was closely connected suffer harm as a result of the publication of defamatory material concerning him. When I pointed out to him that he had not averred that the failure of the Lottery Fund application was the result of the publication of the article, he acknowledged that he had made no such averment but stated that he believed that there was a causal connection.

I am not persuaded that the whole averments about the Boys Club should be excluded from probation. As the pursuer's pleadings presently stand there is, in my view, a distinction to be drawn between the averments about the Lottery Fund grant application and its failure, on the one hand, and the more general averments about the pursuer's position in the Club before and after the publication of the allegedly defamatory article, on the other. On a fair reading of the former averments, I consider that Mr Connal's apprehension - that they form the basis of a claim by the pursuer to recover damages in respect of losses suffered by the Club for which he has no title to sue - is not well-founded. But they are in my opinion irrelevant in the absence of any averment that it was the publication of the article about the pursuer that resulted in the refusal of the application. If the pursuer had had a proper evidential basis for making an averment of such a causal connection, and had made such an averment, I would have taken the view that the averments were relevant in the way suggested by the pursuer, namely as the basis for a submission on his part that part of the injury to his feelings which he suffered as a result of the publication of the article was the hurt of seeing the Club which he had founded and supported over a long period suffering financial harm because of defamatory material published about him. In the absence of such an averment of causal connection, however, I am of opinion that the averments which I have highlighted in italics would fall to be excluded from probation. The remainder of the averments about the Boys Club are in my view relevant as providing detail of one particular context in which the pursuer claims that his reputation was important to him, and was harmed by the publication of the article. I am therefore not persuaded that the averments highlighted by underlining (other than those further highlighted in italics) should be excluded from probation.

So far as the averments of patrimonial loss suffered by the pursuer in his business were concerned, Mr Connal submitted first that it was by no means clear what business the pursuer meant when, in the third sentence of Article 5 of the condescendence, he referred to "his said business", or when, in Article 6, he referred to "his business" or "the business" or "His business affairs". The only averment which identifies a particular business is the first sentence of Article 2 of the condescendence, where it is averred that:

The defenders in their averments (at page 11B) make reference to another business called Suntowers, but the pursuer's response to those averments (at page 9D) affords no basis for supposing that the later references to his business include reference to Suntowers. Secondly, Mr Connal submitted that the averments about the pursuer's discussions with Allied Irish Bank and Scottish and Newcastle Breweries were lacking in specification in that there was no detail given of the nature and extent of the facilities under discussion, or of what business the facilities were sought to support, or of what the nature and amount was of the loss that the withdrawal of the bank and the brewers from the discussions was said to have caused. Thirdly, there was no specification of how the loss of credit-worthiness which the pursuer claimed to have suffered led to his having to "give up the business", or for that matter what was meant by giving up the business, or in what respect or to what amount the pursuer suffered loss by doing so. Fourthly, the averment that his business affairs had been ruined was equally vague.

The pursuer, in response to those submissions, explained that the business referred to included the Cumberland Arms public house. Expanding on that explanation, he said that at the material time he had entered into missives to acquire the tenant's interest in a lease of the premises, had had the licence transferred to him in June 1995, but had not by the date of the publication of the article received a formal assignation of the lease. Following the publication of the article and its coming to their attention, the landlords indicated that they had decided not to proceed with their consent to the assignation, but by September the pursuer had persuaded them not to withdraw from the transaction. Without the funding from Allied Irish Bank and the arrangement with Scottish and Newcastle Breweries (which the pursuer said was inaccurately described in the pleadings as a "trading loan") for which he had been in negotiation before the publication of the article, however, he was unable to continue to operate the public house. In these circumstances, the pursuer said, he assigned the business to other members of his family. The licence was transferred to his daughter and the lease was assigned to a company called Strathbrook Limited. The pursuer was at pains to emphasise that the liabilities as well as the assets were transferred. The pursuer then went on to give an explanation of his involvement with the Suntowers business. The detail of his explanation has no direct bearing on the issues before me, except that the pursuer appeared to indicate that the business losses which he sought to recover related in part to Suntowers. I did not understand the detail of the structure of the pursuer's investment in that business, but the pursuer indicated that part of the overdraft facilities which he was negotiating with Allied Irish Bank related to funds to be invested in some way in Suntowers. The pursuer appeared to be proceeding on the basis that it was sufficient for him to indicate that the publication of the article had had an adverse impact on his business affairs, and that it would then be for the court to assess the amount of his loss.

In my view Mr Connal's criticisms of the pursuer's averments of patrimonial loss suffered through his business are well-founded. I can readily understand that if a defamatory imputation of criminality is made against a businessman, and financial institutions with whom he is in negotiation for funding read the defamatory material and decide as a result to withdraw from negotiations, that sequence of events is likely to cause the businessman to suffer loss. But before any attempt can be made to quantify the loss, much more detail requires to be filled in. The identity, nature and structure of the business or businesses affected requires to be set out. The nature of the impact which the dissemination of the defamatory material had on the business or businesses requires to be identified. The precise nature of the losses suffered requires to be identified before the process of quantification can begin. It is for the person who claims to have suffered loss to establish the loss he has suffered. Accordingly, in the present case, the pursuer requires to address these matters in his averments before he can be said to have made a relevant and sufficiently specific case for recovery of specific patrimonial losses. As matters stand, he has not in my view addressed these matters with anything like the degree of specification necessary to give the defenders fair notice of that aspect of the case against them.

Without the explanation which the pursuer offered, I would have regarded his pleadings as making a case, albeit an inspecific one, for recovery of losses incurred in connection with the public house business, and that business alone. His present pleadings cannot be regarded as making any claim in respect of losses suffered through Suntowers. The other explanations which the pursuer offered serve only to underline the incomplete nature of some aspects of the averments presently on record.

As the pursuer's pleadings on patrimonial loss presently stand, I am of opinion that Mr Connal's submissions about them are well-founded. The problem, as it seems to me, is not with the relevancy of the averments, but with their lack of specification. They do not give fair notice of the case which the pursuer seeks to make. I would therefore be minded to give effect to this aspect of Mr Connal's submission by excluding from probation the averments highlighted in bold in my quotation of Articles 5 and 6 of the condescendence.

Since, as I have indicated, I regard some of the pursuer's averments as lacking in specification rather than fundamentally irrelevant, and since the explanations which he gave in the course of the hearing suggested that the lack of specification may perhaps be capable of being cured by amendment, I do not propose at this stage to pronounce an interlocutor excluding the averments which I have identified from probation and otherwise allowing a proof before answer. Instead, I shall put the case out By Order, to enable the pursuer to consider his position in light of this opinion, and in particular to consider whether to seek leave to amend his pleadings. I would stress that such amendment would not cure the lack of specification unless it identified clearly the business or businesses in connection with which the pursuer suffered loss, the sequence of events by which the publication of the article led to the pursuer suffering patrimonial loss, the nature of that loss, and the manner in which the pursuer offers to prove the amount of the loss. It seems to me to be very much in the pursuer's interests to have the benefit of legal advice in formulating any minute of amendment designed to rectify the deficiencies in his pleadings identified in this opinion.

If, when the case calls By Order, the pursuer does not seek leave to amend or such leave is refused, I am minded to gave effect to the views expressed in this opinion by -

1. sustaining the defenders' first plea-in-law to the extent of excluding from probation -
1. the following averments in Article 5 of the condescendence, namely
1. "on whose behalf application had been made for assistance from the Lottery Fund confidently expected to receive favourable consideration" (page 15C of the Closed Record);
2. "The pursuer also required in connection with his said business that appropriate banking and trading arrangements should be made available to him from time to time" (page 15C-D);
3. "no bank or trading undertaking would have anything to do with the pursuer and" (page 15D); and
4. "The club did not succeed with its lottery application" (page 15D); and
2. the following averments in Article 6 of the condescendence, namely
1. "and to his business. At the time of the publication of the article the pursuer was in discussion with Allied Irish Bank Limited with a view to the provision of overdraft facilities, as also with Scottish and Newcastle Breweries plc as to a trading loan. As soon as the article appeared each of these undertakings withdrew from their discussions with him" (pages 16E to 17A); and
2. "His credit worthiness ceased as a consequence of the article and he has had to give up the business as a result and has received no consideration for it. His business affairs have been ruined as a consequence of the printing and publication of the said article" (page 17B); and
2. quoad ultra allowing a proof before answer.